QUEBEC CITY, Nov. 11 /CNW/ - EnGlobe Corp. ("EnGlobe" or the "Corporation") (TSX: EG), today announced financial results for the third quarter ended September 30, 2009.
Third Quarter Highlights
- $39.3 million in revenues;
- Adjusted EBITDA reached $6.1 million;
- Record quarterly net earnings of $1.9 million.
"We're pleased to report record quarterly net earnings," commented Mr. André Héroux, President and Chief Executive Officer of EnGlobe. "We've worked hard to reduce costs and rightsize our businesses and those efforts are paying off. I feel confident that EnGlobe has now built a strong financial foundation from which it can grow its operations and continue to strengthen its position in the environmental services marketplace," said Mr. Héroux. "Although our industry has been challenged by the economic environment, and while there is a lot of uncertainty about the pace of economic recovery, we have started to see signs of a turnaround within our markets. As the economy works to regain its footing, we are focused on cost improvement as well as continued leadership and investment in key areas that will drive EnGlobe's future growth," added Mr. Héroux.
Third Quarter Results
In the third quarter, EnGlobe generated revenues of $39.3 million compared to $45.8 million for the same period last year, a decrease of $6.5 million. The Organic Waste Management ("OWM") division experienced a planned decrease of revenue that totaled $4.8 million in the third quarter. As part of the Corporation's previously communicated reorganization plan, OWM is now concentrating on activities that generate positive financial contribution. This has resulted in the phase out of certain unprofitable contracts and business activities, which has translated into lower OWM revenues but higher OWM margins with reduced risk.
The Site Assessment and Remediation ("SAR") division generated $31.2 million in revenues in the third quarter, which represented a $1.6 million decrease over the same period last year. In particular, difficult market conditions in the UK and in the USA resulted in lower revenues; however this was partially offset by outstanding performance in France.
In the third quarter of 2009, adjusted EBITDA was $6.1 million compared to $6.4 million in the quarter ended September 30, 2008. This decrease was principally the result of poor economic conditions in the United Kingdom and United States markets. However, this decrease was offset by strong performance in France specifically related to Soil Treatment Facility ("STF") activities, the OWM segment turnaround and a lower cost structure following the implementation of the reorganization plan. Gross profit margin reached 27.8%.
As a result of the foregoing, net earnings amounted to $1.9 million in the third quarter of 2009 compared to net earnings of $0.1 million in the quarter ended September 30, 2008, representing the best quarter in the history of the Corporation in terms of net earnings. Efficient execution of the restructuring plan, ongoing commitment to manage the business with strong discipline, a constant focus on improving operational efficiencies and increased productivity explained the strong financial performance of the third quarter.
Cash used in operating activities in the third quarter was $3.2 million compared with cash used of $0.8 million in the same period last year, a decrease of $2.4 million.
"This has been a very productive quarter for EnGlobe. As a management team, we are no longer focused on the challenges of EnGlobe's past. We have worked tirelessly over the past 12 months to build a company that is cash flow positive and poised for success," said André Héroux, President and Chief Executive Officer of EnGlobe. Commenting on several of EnGlobe's recent strategic actions, Mr. Héroux noted, "EnGlobe has started to show the positive results of the ongoing transformation program. We will continue with our efforts to reduce costs while working hard to grow our revenues in strategic markets."
For the first nine months of 2009, EnGlobe generated revenues of $96.2 million, compared to $108.3 million a year earlier, a decrease of $12.1 million or 11.2%. This decrease was primarily due to the restructuring plan that took place in the OWM segment as explained above.
Adjusted EBITDA for the first nine months of the year was significantly higher at $9.9 million compared to $1.2 million for the same period in 2008. This increase was principally the result of the higher contribution of the OWM and SAR segments, combined with an overall lower cost structure.
For the first nine months of 2009, EnGlobe reported a net loss of $3.6 million, compared to a net loss of $26.4 million for the same period in 2008. The decrease is largely explained by improved operational performance and the non-repetition of the non-cash charges that were incurred in the second quarter of 2008 related to the OWM segment. Cash generated by operating activities in the first nine months of 2009 was $1.2 million compared with cash used of $5.2 million in the same period last year, an improvement of $6.4 million.
Management's Discussion and Analysis containing a full analysis of financial results and Financial Statements can be accessed at www.sedar.com.
About EnGlobe Corp.
EnGlobe Corp. is a leading international integrated environmental services company specializing in the management of contaminated soils and organic based waste streams, with an emphasis on beneficial reuse. EnGlobe offers cost-effective solutions to municipal, commercial and industrial clients in Canada, the north-eastern United States, the United Kingdom and France through its subsidiaries: Biogénie and Celtic Technologies Limited for site assessment and remediation, GSI Environment Inc. for organic waste management, and Tanknology Canada Inc. for tank testing and calibration. Shares of EnGlobe trade on the Toronto Stock Exchange under the ticker symbol EG. Additional information is available at www.englobecorp.com.
This press release contains certain forward-looking statements. Such statements relate to, among other things, sales growth, expansion and growth of the Corporation's business, future capital expenditures and the Corporation's business strategy. Forward-looking statements are subject to inherent uncertainties and risks including, but not limited to: general industry and economic conditions, changes in the Corporation's relationships with its suppliers, pricing pressures and other competitive factors, the availability and costs of fuels and utilities, the results of the Corporation's ongoing efforts to improve cost effectiveness, changes in regulatory requirements affecting the Corporation's business and the availability and terms of financing. Other Risk Factors are set out and described in the Corporation's Annual Information Form which is available at www.sedar.com. Consequently, actual results and events may vary significantly from those included in, contemplated by or implied by such forward-looking statements. In evaluating forward-looking statements, readers should specifically consider the various factors that could cause actual events or results to differ materially from such forward-looking statements.
SOURCE ENGLOBE CORP.
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